Peloton (NasdaqGS:PTON) Q2 2026 Earnings call February 05, 2026 08:30 AM ET Company ParticipantsArpine Kocharyan - Managing DirectorEric Sheridan - Managing DirectorJames Marsh - SVP of Investor RelationsLiz Coddington - CFOPeter Stern - CEO and PresidentShweta Khajuria - Managing Director of Global InternetYoussef Squali - Managing Director and Head of Internet and Digital Media Research GroupOperatorGood day, and welcome to Peloton's Second Quarter Fiscal Year 2026 Conference Call. At this time, all parti ...

Financial Data and Key Metrics Changes - Total revenue for Q2 was $657 million, which was $8 million below guidance, primarily due to lower equipment sales and longer delivery times [20][18] - Adjusted EBITDA was $81 million, an improvement of 39% year-over-year, exceeding guidance by $6 million [25] - Total gross margin was 50.5%, an increase of 320 basis points year-over-year, and 150 basis points above guidance [22] - Net debt decreased by 52% year-over-year to $319 million, reflecting significant balance sheet improvements [26] Business Line Data and Key Metrics Changes - Connected Fitness products revenue decreased by 4% year-over-year to $244 million, driven by lower equipment sales [20] - Subscription revenue decreased by 2% year-over-year to $413 million, impacted by lower paid subscriptions but partially offset by price increases [20] - The commercial business unit achieved 10% revenue growth year-over-year, indicating strong performance in both U.S. and international markets [10] Market Data and Key Metrics Changes - The installed base of equipment showed durability, with high member satisfaction reflected in low churn rates [7] - Member engagement with personalized plans increased by over 10% from Q1, indicating strong adoption of new features [10] Company Strategy and Development Direction - The company is evolving from a connected fitness company to a connected wellness company, aiming to capture a larger share of the $7 trillion global wellness economy [4] - Focus areas include expanding leadership in cardio and strength, growing global commercial footprints, and utilizing AI-driven personalization [4] - The launch of the Peloton Pro series targets light commercial environments, indicating a strategic move to enhance commercial offerings [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of growth despite current revenue declines, noting improvements compared to previous years [46] - The company anticipates a flat net churn rate for the year, reflecting strong member retention despite pricing changes [19] - Future product offerings are expected to enhance growth, with a focus on hardware and software innovations [42] Other Important Information - The company is on track to achieve $100 million in annualized cost savings by the end of fiscal 2026 [15] - A new loyalty program, Club Peloton, has engaged 24% of active members, exceeding internal targets [15] Q&A Session Summary Question: Do you expect hotel partners to upgrade to Peloton Pro products? - Yes, the company has designed Peloton Pro products for light commercial environments and has a healthy pipeline of relationships in hospitality [38] Question: How does Peloton think about creating new revenue streams? - The company sees opportunities in content licensing and expanding its commercial business unit, but is not exploring advertising on its platform [40] Question: Can you clarify the impact of headcount reductions on guidance? - The recent headcount reductions were part of a planned cost savings strategy and are accounted for in the guidance [57] Question: How do you view the commercial business opportunity? - The commercial business unit is seen as a significant growth vector, with potential to generate new relationships and awareness of Peloton products [59]

Peloton (NasdaqGS:PTON) Q2 2026 Earnings call February 05, 2026 08:30 AM ET Speaker4Good day, and welcome to Peloton's second quarter fiscal year 2026 conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star one one ...

Delivered Year-over-Year Improvement in Profitability While Investing in Ambitious Innovation Agenda Raises Full Year FY2026 Adjusted EBITDA Guidance to $450 - $500 million* NEW YORK, Feb. 05, 2026 (GLOBE NEWSWIRE) -- Peloton Interactive, Inc. today reported financial results for the quarter ended December 31, 2025. Q2 FY2026 Financial Highlights Ending Paid Connected Fitness Subscriptions were 2.661 million, a decrease of 214,000 or 7% year-over-year and 6,000 above the midpoint of our guidance range. We o ...

Core Thesis - Peloton Interactive, Inc. is undergoing a significant transformation under new CEO Peter Stern, focusing on profitability and strategic overhaul, with a new product line aimed at enhancing user experience and engagement [2][4][5] Product Innovation - The introduction of the Peloton Cross Training Series features AI-assisted workouts, upgraded hardware, and a built-in movement tracking camera, promoting cross-training and personalized health plans through "Peloton IQ" [2][3] - AI integration is expected to reduce localization costs by translating and dubbing content for international markets [3] Business Model Restructuring - Peloton has shifted its retail model from large stores to smaller mall kiosks and launched "Peloton Repowered" for used equipment [3] - The commercial arm, Precor, is being repositioned to target gyms, hotels, and corporate clients with the new Peloton Pro Series line [3] Market Positioning and Financial Outlook - Stern has repositioned Peloton from a fitness brand to a broader "health and wellness" platform, expanding its addressable market [4] - Despite conservative FY2026 guidance of $2.5 billion in revenue and $425 million in EBITDA, management plans an additional $100 million in cost cuts, indicating potential for outperformance [5] - Peloton raised hardware and subscription prices by 15-20%, expected to add approximately $160 million in EBITDA annually [4] Engagement and Retention - Engagement metrics remain strong, with cancellation rates lower than Netflix's, and subscribers using multiple workout types showing significantly higher retention [4] Investment Sentiment - Peloton is not among the 30 most popular stocks among hedge funds, with 53 hedge fund portfolios holding PTON at the end of Q2, up from 52 in the previous quarter [7] - While Peloton shows potential, certain AI stocks are viewed as having greater upside potential and less downside risk [7]

Peloton (NasdaqGS:PTON) 2025 Conference Summary Company Overview - **Company**: Peloton - **Industry**: Fitness and Wellness Technology Key Changes and Developments - **New Growth Strategy**: Implementation of a multi-year plan aimed at returning to growth, including the launch of the Peloton Cross Training Series and Peloton Pro Series, expanding from five to fourteen products [4][5] - **AI Integration**: Introduction of Peloton IQ, an AI-powered personal coaching platform, positioning Peloton as a leader in AI-driven fitness coaching [5][10] - **Partnerships and Distribution**: Expansion of partnerships and distribution channels, including micro-stores and collaborations with Johnson Fitness and Wellness [5][22] - **Debt Reduction**: Significant reduction of net debt by half over the past year [5] Vision for the Future - **Total Wellness Provider**: Ambition to evolve from a cardio-focused company to a comprehensive wellness provider, incorporating strength training, mental well-being, sleep, and nutrition [6][8] - **Ecosystem Development**: Creation of a supportive ecosystem around personal coaching, member engagement, and data utilization to enhance user experience [8] Product Launch and Consumer Reception - **Cross Training Series Impact**: Positive early consumer reception with a noted increase in strength workouts and overall member engagement [9][11] - **Consideration Cycle**: Long consideration cycles for product purchases, with many customers taking months to decide [12] - **Sales Trends**: Shift towards higher-end products (Plus Series) and increased sales to new members, indicating a growing customer base [14][16] Subscription and Churn Management - **Churn Stability**: Despite a subscription price increase, churn rates remained flat due to factors like customer tenure and increased workout frequency [18][19] - **Comparison with Previous Price Increase**: Current churn rates are more favorable compared to the last price increase in 2022, reflecting improved customer loyalty [20][21] Distribution Strategy - **Micro-Stores vs. Full-Size Stores**: Transition from large stores to micro-stores has shown promising results, with eight out of ten micro-stores performing at or above expectations [22][23] - **Retail Partnerships**: Collaboration with Johnson Fitness to enhance visibility in the treadmill market, aiming to establish Peloton as a go-to brand for at-home fitness [24][25] Financial Performance and Cost Management - **Cost Savings**: Targeting $100 million in additional savings for FY26, building on previous cost-cutting measures [29] - **Gross Margin Improvement**: Anticipated improvement in connected fitness gross margins due to increased sales volume and product mix [30][31] Marketing and Customer Acquisition - **Marketing Efficiency**: Focus on optimizing customer acquisition costs while maintaining a favorable lifetime value to customer acquisition cost ratio [32][33] - **Product Portfolio Development**: Emphasis on enhancing the product lineup to drive subscription growth and stabilize the subscriber base [34][35] Debt Management and Capital Allocation - **Debt Refinancing Plans**: Plans to refinance a $1 billion term loan by May, aiming for better terms and increased flexibility for capital allocation [36][38] - **Potential for Shareholder Returns**: Future capital allocation may include stock buybacks, contingent on successful debt refinancing and investment opportunities [40][41] Executive Compensation and Shareholder Alignment - **Performance-Based Compensation**: Shift towards performance-weighted executive compensation to align with shareholder interests and reduce dilution [42][43] Underappreciated Aspects of Peloton - **Strength Training Leadership**: Peloton is recognized as the largest strength subscription company, highlighting its potential in the strength training market [45][46] - **Brand Loyalty**: High member satisfaction and low churn rates underscore Peloton's unique position in the fitness industry, fostering confidence in its long-term resilience [47]

Core Insights - Peloton has partnered with the Formula 1 Las Vegas Grand Prix to create exclusive fitness programming during the race weekend, marking a unique collaboration between the fitness and racing industries [1][7]. Group 1: Event Collaboration - Peloton will host a series of live classes at the Awakening Theatre at Wynn Las Vegas, featuring a mix of Cardio and Strength programming led by Peloton instructors [2]. - The collaboration includes the introduction of a Formula 1 Las Vegas Grand Prix 2025 Class Collection on Peloton's platform, allowing members to access recorded classes from the event [2][3]. Group 2: Exclusive Content - Peloton will capture exclusive Scenic content, enabling members to virtually experience the Las Vegas Strip Circuit from their Peloton Bike or Tread [3]. - The Las Vegas Grand Prix Scenic experience will feature a 3.8-mile track with 17 high-speed turns, available exclusively on the Peloton platform [3]. Group 3: Marketing and Promotion - Peloton's marketing strategy includes high-impact media placements throughout the race weekend, promoting its new Cross Training Series and enhancing brand visibility [6]. - The partnership aims to merge the high-energy environments of racing and fitness, appealing to both communities and creating innovative fitness experiences [7]. Group 4: Upcoming Class Schedule - Specific classes recorded during the event include a 30-minute ride and run with Peloton instructors, available on the platform starting November 24 [5].

Core Insights - Peloton Interactive, Inc. reported better-than-expected Q1 results, leading to a rise in its stock price [1] Q1 Results - The company reported quarterly earnings of $0.03 per share, surpassing the consensus estimate of $0.01 [2] - Quarterly revenue reached $550.8 million, exceeding the Street estimate of $539.81 million [2] Fiscal Guidance - Peloton raised its fiscal 2026 revenue guidance to a range of $2.49 billion to $2.5 billion, above the analyst estimate of $2.45 billion [3] - CEO Peter Stern emphasized the company's disciplined execution leading up to new product launches [3] Analyst Insights - JPMorgan analyst Doug Anmuth noted Peloton's successful cost-cutting measures and operational efficiencies, predicting a return to growth in the second half of the year [4] - JPMorgan maintained a Neutral rating with a price target of $9, acknowledging industry challenges [5] - Truist Securities analyst Youssef Squali maintained a Buy rating and raised the price target from $11 to $12 [6] - Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating with a $9 price target [6] Stock Performance - Peloton shares increased by 9.31% to $7.33 on Friday afternoon [5]

Financial Data and Key Metrics Changes - Total revenue for Q1 was $551 million, comprising $152 million from connected fitness products and $398 million from subscription revenue, outperforming guidance by $6 million [19] - Paid connected fitness subscriptions decreased by 6% year-over-year to 2.732 million, with average net monthly churn improving to 1.6%, a 20 basis point improvement year-over-year [18][19] - Total gross profit was $284 million, a decrease of 7% year-over-year, with total gross margin at 51.5%, down 30 basis points year-over-year [20][21] - Adjusted EBITDA was $118 million, a 2% improvement year-over-year, and free cash flow increased to $67 million, significantly outperforming prior expectations [24][25] Business Line Data and Key Metrics Changes - Connected fitness products revenue decreased by $7 million, or 5% year-over-year, while subscription revenue decreased by $28 million, or 7% year-over-year [19] - Connected fitness products gross margin was 6.9%, negatively impacted by a $13.5 million inventory accrual, but would have been 15.8% excluding this charge [21][57] - Subscription gross margin increased to 68.6%, an 80 basis point improvement year-over-year [21] Market Data and Key Metrics Changes - The connected fitness market in the U.S. is still declining year-over-year, but the rate of decline has decelerated to low single digits [50] - The overall wellness economy in the U.S. is estimated to exceed $2 trillion, indicating a significant market opportunity beyond connected fitness [52] Company Strategy and Development Direction - The company is focusing on product innovation, wellness expansion, and new distribution channels, including a new retail partnership with Johnson Fitness and Wellness [12][13] - The launch of the Peloton Cross Training Series and Peloton IQ aims to enhance member engagement and outcomes, with a shift towards premium products [9][10] - The company is committed to operational discipline and business excellence, targeting at least $100 million in run rate cost savings by the end of fiscal 2026 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive operating income on a full-year basis in fiscal 2026, despite external challenges [32] - The anticipated financial impact of the recent recall is reflected in the guidance, with expectations for a small drag on subscriptions but overall revenue impact expected to be immaterial [4][40] - The company remains focused on execution and believes it offers an unmatched ecosystem of products and experiences to help members invest in their health and well-being [16] Other Important Information - The company has expanded its retail presence significantly, now having 10 micro stores in the U.S. and a retail presence in 46 states [12] - The acquisition of Breathwork aims to enhance mental fitness offerings, which are now included in all-access subscriptions [10][11] Q&A Session Summary Question: What is the market opportunity for the new commercial business unit? - Management highlighted a large market opportunity with low share and emphasized the strategic combination of Precor's commercial-grade equipment and Peloton's software and community [32][33] Question: Are there any plans in the next five years to provide for dividends? - Management indicated it is early to discuss dividends but emphasized the importance of deleveraging and maximizing capital allocation options in the future [35][36] Question: Can you compare the recent recall to the previous one? - Management explained that the recent recall was based on different models and incidents, with a small anticipated headwind to paid connected fitness net churn due to elevated subscription pauses [38][40] Question: How do you see churn normalizing post-price increase? - Management noted that while there was an initial spike in cancellations, churn has moderated back to normal levels, with expectations for flat churn over the year despite a temporary increase in Q2 [41][44] Question: What is the overall demand environment? - Management acknowledged continued softness in connected fitness equipment demand but remains optimistic about long-term growth potential in the wellness economy [50][52]

Core Insights - Peloton Interactive, Inc. is enhancing its digital strategy and product offerings with AI-powered personal coaching and a broader range of wellness content [2][3] - The company is launching the Peloton Cross Training Series, which includes new base and premium equipment designed for cross-training [2][3] Product and Features Overview - Peloton has updated its entire product lineup with the Cross Training Series, featuring five fitness machines: Cross Training Bike, Bike+, Tread, Tread+, and Row+ [4] - Each new model includes a swivel screen, faster processors, stronger WiFi and Bluetooth, enhanced sound, hands-free voice control, and an integrated three-speed fan [5] - Peloton IQ, available on Cross Training Series Plus models, offers personalized fitness through adaptive weekly plans, real-time insights, and form correction via a built-in camera [6] Wellness Expansion - Peloton is broadening its wellness offerings to include recovery, mental health, and specialty medical programs through new collaborations [7] - Future partnerships include an eight-week program with Halle Berry's Respin Health focusing on menopause and a musculoskeletal injury prevention program with the Hospital for Special Surgery [7] Financial Performance - Peloton's shares have increased by 37.1% over the past three months, contrasting with a 0.2% decline in the Zacks Leisure and Recreation Products industry [8] - In Q4 2025, Peloton reported 552,000 paid app subscriptions and total revenues of $607 million, exceeding guidance by $21 million [9]